Howard Schultz to leave Starbucks

The announcement, which Schultz made in a memo to employees today, is likely to stoke speculation that the Starbucks chairman will run for the presidency of the United States.
By Heather Lalley and Peter Romeo
on Jun. 04, 2018

Howard Schultz is leaving Starbucks at the end of the month to explore a career in public service or philanthropy, among other options, ending a four-decade tenure that took the concept from a virtual unknown to one of the industry’s most dominant and influential powers.

The announcement, which Schultz made in a memo to employees today, is likely to stoke speculation that the Starbucks chairman will run for the presidency of the United States.

Myron Ullman, former chairman and CEO of J.C. Penney, will succeed Schultz as chairman of Starbucks. Schultz will assume the honorary title of chairman emeritus on June 26.

Schultz’s departure will cap a rags-to-riches story that began in the housing projects of Brooklyn, where the young New Yorker witnessed his family’s decline into poverty because an injury ended his father’s job as a diaper-service deliveryman. As Schultz recalled in his best-selling autobiography, he vowed to build an organization that would never allow such a turn of events.

He saw his shot while selling wholesale coffee carafes. Sizable orders were coming from a coffee outlet in Seattle’s Pike Place Market. Schultz decided to visit the customer, a stall called Starbucks.

A year later, he became the chain’s director of operations and marketing.

Schultz later purchased the company, after being rebuffed in his efforts to acquire control of the competing Peet’s Coffee chain, and served as CEO from 1987 to 2000. He turned Starbucks into one of the industry’s most progressive employers and operators, breaking convention with such advances as offering health insurance to all employees, and suggesting customers view units as their “third place” hangout.

In 2008, he took back the CEO job because of concerns the concept was straying from its roots as a celebration of all things coffee. He immediately scuttled a line of breakfast sandwiches, saying they smelled up the stores, and lowered pieces of equipment because they blocked customers’ views of baristas practicing their art.

He also shut every store for several hours for a coffee-making training session in 2008, foreshadowing last week’s chainwide closure to re-emphasize the chain’s commitment to diversity.

Schultz surrendered the CEO’s title again in 2017, to current chief Kevin Johnson, to become executive chairman.

Along the way, the former Brooklynite took an active interest in public affairs, commenting on race relations, drawing team members into formal discussions of diversity, and publicly voicing his opinions on political matters. His actions led to speculation that he would jump into the 2016 presidential race as a last-minute alternative to Democratic Party nominee Hillary Clinton.

Schultz dashed those reports, and has similarly downplayed speculation that he still might make a run for the office now held by Donald Trump, another New York-born billionaire, whose policies he has pointedly criticized.

"For years I’ve had a dream to build a different kind of company, one that has the potential to enhance lives and endure long after I was gone," Schultz wrote to employees. "Thanks to you, my dream has come true."